I. Summary

On July 28, 2009, the European Commission (EC) launched a formal consultation on the EU rules applicable to distribution agreements. The current key legislation expires on May 31, 2010, and the intention appears to be to adopt the new rules before the end of this year. These proposals are important to both suppliers and retailers and affect both physical and online distribution. While the EC believes the current economic effects-based rules introduced in 1999 work well and do not need substantial change, it has published a revised draft Regulation and Guidelines that contain some important changes and clarifications from the existing law, in particular, with respect to internet sales, resale price maintenance, and purchasing power of large retailers.